Delinquency rates on commercial/multifamily mortgages remain low in the first quarter of this year, although they have increased slightly from 4Q07, according to data from Mortgage Bankers Association (MBA) released last week.
The MBA's analysis looked closely at commercial/multifamily delinquency rates of five of the largest investor groups - commercial banks and thrifts, CMBS, life insurance companies, Fannie Mae and Freddie Mac - which together have more than 80% of the commercial/multifamily mortgage debt outstanding.
Based on the unpaid principal balance of loans (UPB), the association reported the delinquency rates for each group at the end of the fourth quarter.
The 30+ day delinquency rate on loans held in CMBS rose to .48%. The 60+ day delinquency rate on loans held in life company portfolios remained flat at .01%. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose to .09%. The 60+ day delinquency rate on multifamily loans held or insured by Freddie Mac rose to .04%. Finally, the 90+ day delinquency rate on loans held by FDIC-insured banks and thrifts rose to 1.01%.
To put these numbers in context, of 35,192 commercial/multifamily loans in life company portfolios, with a total unpaid principal balance of $249 billion, only 10 loans with an aggregate UPB of less than $29 million were 60+ days delinquent at the end of the quarter. Of $1.2 trillion of commercial/multifamily loans at FDIC- insured banks and thrifts, only $12 billion were 90+ days delinquent.
The MBA did not compare delinquencies between investor groups because there were differences in the tracking measures used. Instead, the MBA was interested in how the performance of loans for each investor group has varied over time.
Meanwhile, last week the MBA also released a report on the level of commercial/multifamily mortgage debt outstanding, which grew by 1.8% in 1Q08, to $3.4 trillion.
In looking at the analysis of the Federal Reserve Board Flow of Funds data, the $3.4 trillion debt outstanding was an increase of $60.8 billion from the fourth quarter 2007.
Multifamily mortgage debt outstanding grew to $856 billion, an increase of $18.5 billion or 2.2 % from the fourth quarter.
"Investors continue to increase their holdings of commercial/multifamily mortgages," according to MBA's Senior Director of Commercial/Multifamily Research Jamie Woodwell.
The global credit crunch resulted in investor groups such as banks, thrifts, life insurance companies, Fannie Mae and Freddie Mac increasing their holdings of commercial/multifamily mortgages during the quarter.
Commercial banks hold $1.43 trillion (42%), the largest share of commercial/ multifamily mortgages.
CMBS, CDO and other ABS issues have the second largest share of commercial/multifamily mortgages, holding $777 billion (23%).
Life insurance companies hold $309 billion (9%), and savings institutions hold $226 billion (7%). GSEs and agency- and GSE-backed mortgage pools, including Fannie Mae, Freddie Mac and Ginnie Mae, hold $143 billion in multifamily loans.
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